VZCZCXRO4116
RR RUEHDE RUEHROV RUEHTRO
DE RUEHNR #2129/01 2800934
ZNR UUUUU ZZH
R 070934Z OCT 09
FM AMEMBASSY NAIROBI
TO RUEHC/SECSTATE WASHDC 1258
INFO RUCNSOM/SOMALIA COLLECTIVE
RHEHNSC/NSC WASHDC
RUEAIIA/CIA WASHDC
RUEKDIA/DIA WASHDC
RHMFIUU/CJTF HOA
UNCLAS SECTION 01 OF 02 NAIROBI 002129
SENSITIVE
SIPDIS
DEPT FOR AF/E
E.O. 12958: N/A
TAGS: ECON EFIN PGOV PINR SO
SUBJECT: SOMALIA - PRIVATE FINANCING FOR THE TFG
1. (SBU) Summary: On October 1, AF/E,s Senior Somalia Desk
Officer and the Djibouti Somalia Watcher met with Banque Pour
le Commerce et l,Industrie ) Mer Rouge (Bank for Commerce
and Industry ) Red Sea; BCIMR) CEO Ould Amar Yahya at the
Djibouti main office. BCIMR is the only international bank
currently operating in Somalia, with a branch in Hargeisa.
Yahya noted that the Hargeisa branch has been so successful
that BCIMR is in talks with the TFG to open additional
branches in Somalia wherever and whenever the security
situations permits. He also offered suggestions on providing
a baseline budgetary level for the TFG through private
financing. End summary.
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Somali Businesspeople are the Engine of Regional Growth
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2. (SBU) AF/E,s Senior Somalia Officer and the Djibouti
Somalia Watcher discussed Somalia's economic outlook with
BCIMR's Yahya on October 1. Yahya presented an optimistic
prediction for the future if security was achieved, noting
that Somali businesspeople that deal in every imaginable
commodity sold throughout the region are the foundation of
BCIMR's deposit base. Somali qat (a leaf that produces a mild
narcotic effect when chewed) livestock, sugar, pasta, edible
oil and cement in particular have enjoyed particularly high
profits in recent years; and are the backbone of the regional
economy. A score of dealers in these commodities have current
individual accounts worth more than $150 million each, and
there are hundreds of other accounts in the seven to
eight-figure range, Yahya said. And those are just the
accounts for individual Somali businesspeople. When you add
corporate, local and national government, NGO, international
organization and individual accounts, Yahya said that BCIMR's
projected growth for 2009 was in the process of being revised
upward, despite the global economic crisis. As soon as the
security situation permits, Yahya continued, BCIMR plans to
provide financing for companies involved in Somalia
infrastructure repair projects, such as the Berbera port
renovation project proposed by the French-owned Bollore
Africa Logistics Group.
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Who Benefits From Somalia's Continuing Disarray?
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3. (SBU) At a time when local, regional and international
actors are coalescing behind the TFG, friends of Somalia have
to acknowledge who benefits from disarray in Somalia and
discuss ways that they could reap similar benefits from a
re-unified Somalia, Yahya said. Local and international
businesspeople make astronomical profits (despite the risk)
since they are relieved of the necessity of paying the normal
costs of doing business in a stable society. Front-line
states receive income, as well as international assistance,
that would go to a unified Somalia if it existed. And,
international organizations and NGOs that are created to work
in Somalia expend the bulk of their resources on supporting
ever-increasing staffs that work "on" Somalia in Nairobi, but
with few in-country initiatives.
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How to Privately Finance the TFG
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4. (SBU) Yahya believed that it would be possible for the
Somali private sector to provide a baseline budget for the
TFG. If the TFG would launch an appeal to Somali business
people to contribute, say, one half of one percent of their
yearly profits, the TFG would have a substantial financial
base from which to work. Funds could be distributed through
and accounted for by the Price Waterhouse Coopers mechanism.
The TFG might also provide each contributor with an incentive
that would meet his needs. Once prospective international
investors saw Somali businesspeople successfully investing in
the rebuilding of their country, Yahya concluded, the full
spectrum of expeditionary companies such as Petronas (already
in Ethiopia) would rapidly follow.
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BCIMR/Yahya Antecedents
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5. (SBU) BCIMR is a subsidiary of the French Group Bred
Banque Populaire. The group is present in 71 countries,
using well-known names such as NATIXIS, COFACE and Banque
NAIROBI 00002129 002 OF 002
Populaire. It is the largest bank in the Horn of Africa,
with 60 - 70 percent of deposits and 51 percent of the loans
distributed. During its fifty years in Djibouti, BCIMR has
been a key facilitator of regional economic development, in
particular in Ethiopia, Somalia, Yemen, and Eritrea. Its
headquarters is in Djibouti City. The Hargeisa branch opened
in February 2009, and was the first to be opened by an
international bank in Somaliland.
6. (SBU) Ould Amar Yahya is a French national of Mauritanian
descent. In addition to being the CEO of BCIMR, he is the
President of the Djibouti Professional Banking Association.
A senior French banking official, Yahya was the director of
the Commission des Operations de Bourse (French Stock
exchange) market surveillance department before he was
dismissed in 2000 for suspected insider trading. He was
quickly rehabilitated and picked up by Bred. When Bred
bought BNP-Paribas, interest in BCIMR early in 2007, Yahya
was made CEO.
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Comment
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7. (SBU) There now seems to be local, regional and
international will to support the TFG in its quest to "take
back" Somalia. As a result, policymakers and implementers
must include discussions on how to put Somalis in the
forefront of any durable solution and ensure that proposals
for such a solution feature concrete suggestions on how those
who have benefited from a generation of disorder could reap
even more benefit from a Djibouti Process designed to produce
stability.
HOZA